Court of appeal decision provides clarity in termination cases

By Tony Poland, LegalMatters Staff • A recent Ontario Court of Appeal (ONCA) ruling clarifies the threshold to establish wilful misconduct under the Employment Standards Act, 2000 (ESA) and provides guidance on how to assess sexual harassment in the workplace, says Ontario employment lawyer Nadia Zaman.

The case involved the manager of a company who was terminated for cause after slapping a female employee on the buttocks. At trial, the court found the  manager’s dismissal was justified and he was denied all common law and statutory entitlements.

The Court of Appeal upheld the dismissal and found the manager was not entitled to common law damages. However, the ONCA ruled that his behaviour did not constitute “wilful misconduct” and he was entitled to the minimum termination entitlements under the ESA.

Zaman, an associate with Rudner Law, says the decision helps to clarify the rules dealing with just cause under the ESA.

‘This ruling is quite significant’

“This ruling is quite significant. There has been some confusion about just cause for dismissal because some cases held that even where it exists, the employee was still entitled to statutory termination pay,” she tells LegalMattersCanada.ca. “That is because common law refers to just cause for dismissal, whereas the Employment Standards Act specifically refers to wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

“What the court essentially said is that just cause for dismissal can exist without wilful misconduct,” Zaman adds. “What is even more critical about this case is that the Court of Appeal clarified the threshold to establish wilful conduct under the ESA and also provided guidance regarding how sexual harassment should be assessed in the workplace.”

She says termination for cause “is seen as the capital punishment of employment law.”

In this case, the ONCA found that the single incident of inappropriate touching did not amount to wilful misconduct because it was not preplanned, says Zaman, who was not involved in the case but comments generally.

Did the punishment fit the crime?

“When it comes to dismissal for cause, courts will look at proportionality. Did the punishment fit the crime?” she says. 

During the Superior Court trial, Justice William S. Chalmers was told the workplace had a “joking environment” and the manager and the woman had engaged in bantering in the past.  

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However, Justice Chalmers writes that although the woman “may have participated in the jokes, this does not mean she consented to being touched on a sexual part of her body” and that slapping her “on the buttocks in the presence of the other male workers is very serious and unacceptable conduct.” 

“Even in a joking environment there is a line that cannot be crossed, and that line includes physical touching without consent of a sexual and private part of someone’s body. There is no place for any conduct which could result in a person feeling demeaned or disrespected,” he writes.

Important decision for employers

Zaman says employers need to understand the significance of the ruling.

“Essentially, we now have this new element needed to establish wilful misconduct,” she says. “Employers must now prove an employee engaged in misconduct that was not only intentional, but also preplanned. That will be more difficult to establish and, as a result, it is going to expose more employers to liability because they are going to be obligated to provide employees with their statutory ESA entitlement for conduct that falls short of wilful misconduct.”

Proving the preplanning can be difficult, Zaman explains.

“Many things can happen inadvertently and may not be intentional,” she says, “Were there indications that the employee was thinking of doing something that could be considered wilful misconduct?

“There could be email or other documentary evidence. If the employee spoke to someone about it, even if it was an off-the-cuff remark or a joke made to a co-worker that could potentially show that there was an element of preplanning,” Zaman adds. 

‘Too early to tell exactly how this is going to play out’

She says because the ruling is so new, “it is too early to tell exactly how this is going to play out” so employers should carefully examine their obligations in a termination for cause.

“One of the broader aspects to consider is that both levels of court have sent a clear message that inappropriate workplace atmospheres and sexual harassment will not be tolerated. That is the first thing we would tell employers regardless of this case,” says Zaman. “The fact that there is now this new element that makes it more difficult for employers to establish wilful misconduct reaffirms the understanding that just cause for dismissal has a very high threshold and employers must engage in a contextual analysis when considering it. 

“We always advise employers to seek legal advice sooner than later,” she adds. “That way they will have the expertise of an employment lawyer to guide them through the process prior to termination, which will help minimize any potential liability.”

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